Yes Bank Underreported Bad Loans By Rs 3277 Crore, RBI Assesses

The Central bank has extracted more than $450 million in extra bad loans at Yes Bank. The creditor is opposing a shadow-banking crisis and concerns over soured debt and capital.

Gross non-performing assets measured by the Reserve Bank of India were Rs 3,277 crore ($457 million) higher than Yes Bank, the Mumbai-based lender said. The bank has already confidential Rs 1,259 crore of the divergence as bad loans, it said.

Earlier disputes with the Central Bank over Yes Bank’s reporting of bad debts leads to remove co-founder Rana Kapoor as chief executive officer. New CEO Ravneet Gill is trying to raise funds to revive growth and assure investors that worst is over for the bank, which has fallen 65% this year.

Investors are likely to focus more on Yes Bank’s fund-raising plans than the latest asset-quality divergence, according to Diksha Gera, Bloomberg Intelligence analyst. “Its impending capital raise continues to be the biggest catalyst for the bank’s outlook,” she wrote.

“Earlier this month it has attracted $3 billion of proposals for a stake-sale offer,” Yes Bank said. A board meeting will be called by the end of November to finalize the raising of capital, the bank said.

RBI evaluated the bank’s non-performing assets mounted at Rs 11,160 crore, and Yes Bank disclosed more than Rs 7,880 crore for the year, the lender reported.

The central bank has found a divergence of Rs 978 crore in provisions. Yes Bank has made provisions of Rs 346 crore and set aside a further Rs. 632 crore for 2018-19, it said. Other lenders including Bank of India have disclosed divergence in bad loans and provisions recently.